Labor markets in the Middle East and North Africa

By Christopher Pissarides

Abstract

This paper discusses the problems that have confronted the labor markets of countries in the Middle East and North Africa region, drawing from the experience of Egypt, Jordan, Morocco and Algeria. The main purpose of the discussion is to identify the areas of data needs and to suggest ways to tackle them. Countries in this region are characterized by fast population growth, low female labor-force participation rates, a large but declining agricultural sector and a large public sector. The entire region benefited from the 1970s oil boom, which came to an abrupt end in 1982. Since then, output and productivity growth stagnated, real wages fell and unemployment became a serious problem, especially for young workers. The end of the oil boom necessitated a structural change in industry and a running down of the public sector, which mainly financed itself from oil and oil-related revenues. This restructuring does not appear to have taken place. The paper argues that more information is needed on the kind of activities pursued in the private small-enterprise sector, which is largely informal, in order to ascertain whether there is a sufficiently large base there for future growth. It also discusses the kind of studies that might shed light on the nature of the unemployment problem, such as studies at the individual and family level